Things I found and thought were interesting… maybe you'll think so too

Network diagrams are a popular way of visualizing social and corporate relationships. Network theory has been used to model telecommunications performance and especially, the Internet. Communications networks increase in value as the number of connections increases. Metcalfe’s Law attempts to quantify the increased value.

Optimizing Metcalfe’s Law

For a network with n members, Metcalfe’s Law posits that the total value of that network is proportional to n * (n-1). Metcalfe’s Law as applied to the Internet, and even to the telephone network, is only valid if all connections have equal value. This is incorrect. Some internet connections are hardly used and contribute limited value. Of course, there are reasons to connect everyone that are not based on monetary value! Rural electrification is an example.

Andrew Odlyzko’s article about Metcalfe’s Law (IEEE Spectrum, 2006) was written with a keen awareness of the 2000 dotcom bubble. Odlyzko demonstrated how Metcalfe’s Law’s applicability could be limited by the equal value assumption, among others. I read it, and wondered: What is the Internet’s optimal number of nodes and connections? When did the value of a larger Internet network start diminishing?

At some point, ISPs (Internet Service Providers) stopped charging users for access, as the business of delivering content became more valuable than providing greater network connectivity. AOL charged for service until 2002 or so.

I thought it would be helpful to begin with a timeline of Internet growth, by number of sites connected and corresponding events, as a starting point for determining incremental value. I searched for a streamlined history, but the best that I could find is provided by The Computer History Museum, and it isn’t quite linear. It also has a lot of technical detail that isn’t relevant for verifying Metcalfe’s Law. I decided to construct a timeline of dates and nodes, from which connectivity can be determined. I am writing this partly for myself, for reference purposes. (I don’t know how to value connectivity, not yet.)

In the beginning

In the beginning, the Internet had only two nodes. It was called the ARPANET. (more…)

Light, sweet crude is the most desirable grade of crude oil because it requires minimal refining while producing the most gasoline. This chart is useful when considering geopolitical risk and commodities prices, as it illustrates where the “best” oil is.

Oil types by country (click image to view full-sized)

The chart was produced by the U.S. Department of Energy in 2012. Perhaps that is why West Texas Intermediate (WTI) crude is not listed, as the U.S. was not an oil exporting nation until recently, under President Obama’s administration, although we are not a net oil exporter.

OPEC

The Organization of Petroleum Exporting Countries has had varying levels of power since its founding in 1960 and heyday in the 1970s. Saudi Arabia has always been the controlling producer in the cartel. OPEC’s objective is to control oil price by either freezing production or cutting production.

This image was originally developed as the focal point of the Math Awareness Month poster of April 2000. The theme was “Math Spans All Dimensions”. It was too lovely to be retired, and appeared again at TFBCON2003.

According to the artist, Brown University professor Thomas Banchoff, it is suffused with joy, just as I had hoped!

Energy market pricing behavior seems contrary to the relationship between supply and demand. The oddly behaving RIN market is an intermediate factor that influences gasoline prices for automobiles. RIN (Renewable Identification Numbers) should be decreasing. Instead, they are too high.

Bio-fuel pricing anomaly

RIN establish compliance with standards for non-fossil fuel usage, specifically, for corn-based ethanol as a blend in gasoline. In 2007, legislation was passed to encourage greater use of ethanol. The percentage requirement of ethanol is set by the EPA. It increases annually, and is calculated at an aggregate level, measured volumetrically, over all U.S. domestic consumption.

My favorite energy blog, Platt’s Oil Barrel, featured a guest post* by former Special Assistant to President Obama and Senior Director for Energy and Climate Change of the National Security Council Jason Bordoff, explaining anomalous RIN price behavior, and what the EPA is doing about it. He noted two reasons for the seemingly anomalous pricing.

Hitting the blend wall

Renewable Fuel Standards (RFS) were revised in 2007, based on the assumption that gasoline usage would increase over time. In fact, it has not done so, not consistently. Instead, it decreased during 2011-2013, yet the schedule of increasing amounts of ethanol has remained, as legislated. As a result, according to Bordoff, we are now hitting the “blend wall”, when blenders physically cannot put enough ethanol into the gas supply to comply with RFS law.

Bordoff identified a second reason:

broad-based skepticism in the market that EPA will use its waiver authority to avoid the blend wall—even though EPA just went to unusual lengths to signal precisely that it will.

Federal Reserve v. EPA: Powers and purpose

The bio-fuel situation bears an odd resemblance to the rational expectations based logic of monetary policy. It is difficult for the Federal Reserve to effectively signal to markets, e.g. the anticipated (and appropriate!) end of quantitative easing. The Federal Reserve System has taken measures to increase transparency. Fed Governors Bernanke and Yellen hold scheduled press conferences. Bernanke was the first Federal Reserve governor to do so. The Fed was audited by the GAO in 2012. Federal Open Markets Committee (FOMC) meeting notes are published and posted online.

Some years ago, I studied mathematics and statistics. At that time, there was only one statistician among the mathematics department members, maybe the entire Swarthmore College faculty, Gudmund R. Iversen. He was my academic adviser. Professor Iversen was grey, tweedy and Norwegian. He always addressed me as Miss Kesselman, which helped alleviate my shyness at the time.

Lunch with Tufte

Professor Iversen had a group of colleagues, all statisticians from other academic institutions. They would visit Swarthmore to give lunchtime talks, or more typically, late Friday afternoon presentations to mathematical statistics students.

Napoleon’s March to Moscow. Charles J. Minard, 1869

I recall one particular guest statistician. Edward Tufte was on the faculty of Princeton University, and had recently written his first book, The Visual Display of Quantitative Information. The venue was a small private room in Sharples dining hall. I was one of maybe 20 attending. (more…)

There has been so much tumult in bitcoin and crypto currencies over the past few days! Interest and concern extends beyond online communities. Motives vary.

Mining with Windows 7

Decentralized and anonymous

There are two conceptual pillars of trust that uphold bitcoin as being superior to fiat currency. The first is decentralization. The fiat currency of reference is primarily the US dollar, for the time being. Why? Because the $US is the world’s reserve currency, for now. It is highly centralized. As ideological (but not market) confidence in the $US has diminished, the appeal of an apolitical, alternative currency increases, especially one that is a fungible, stable store of value.

The second conceptual pillar of bitcoin is anonymity. US dollars held as cash will be anonymous until one wants to use them for exchange for commercial transactions of size. Bitcoin has some anonymity shortcomings, but there may be tractable remedies. That is a detailed discussion, widely covered elsewhere.

Centralization of bitcoin

All markets are game theoretic. Bitcoin is more transparently so. I really wish we could ask Professor John Nash what he thinks of bitcoin! Nash wrote a pleasant, accessible article that described bitcoin-like currency, titled “Ideal Money” a few years ago. (more…)

Not an autodidact

My only education-related experience has been passive, as a recipient. From kindergarten through 12th grade, I attended public schools in Las Cruces, New Mexico. I loved learning algebra, calculus, chemistry, English literature, French, U.S. history, physics, drafting, home economics, and orchestra. I find it difficult to learn from self-instructional materials. Learning by doing is effective, but requires some guidance.

K-12 education

I perceive betrayal of public interest throughout the U.S.A., due to federal government educational policy. New York City is especially troubled. Exceptionally wealthy individuals with ZERO experience or training in education have decided that they know what is best for America’s children.

The 0.1% of the 0.1%

The Brookings Institute describes them as the 0.1% of 0.1% in assets. Assets held is a robust metric for gauging wealth. It is important to distinguish between wealth and income. Income fluctuates from year to year, even for the wealthy. Causes vary. Some have profound impact, such as significant reversals of fortune. Some are merely transitory, e.g. accounting losses reported in order to minimize impact of tax law changes. These 0.1% of 0.1% individuals choose to actively direct the projects that are beneficiaries of their philanthropy.

Philanthropy, education reform and charter schools

Most education reform activists, or perhaps investors, have no knowledge, nor experience in public school education. Rather, they are exceptionally capable leaders of global software conglomerates. Others have great prowess as hedge fund managers, venture capitalists or real-estate moguls. Several are Wal-Mart family scions. Education reformers who have children educate them at private schools like Philips Andover or Choate, yet they claim that charter school operators provide a superior education, compared to public schools in the U.S.A.

How to generate random numbers from spam

Generating random numbers is pretty complicated if you need them for cryptographic algorithms. This software generates them based on spam comments…

It caught my eye as a sort of “spinning spam into RNG gold”, or more likely, PRNG (pseudo-random number generated) gold. Many WordPress blogs, whether self-hosted using WordPress.org or not, effectively use Akismet as a comment spam sieve. (more…)

I never attended DEFCON, though it remains a dream I hope to realize one day, soon. It may soon become too logistically awkward due to increasing numbers of attendees.

Shodan is a remarkable search engine. Traditional search engines use “spiders” to crawl websites. Shodan culls data from ports. It was created by John Matherly in 2007. He continues to develop it.

Shodan is helpful for locating web server vulnerabilities. It is available as a free service, for up to 50 searches. Query syntax includes searches by country, host name, operating system and port. Shodan can search for software AND hardware. It has been acknowledged by mainstream media. The most prominent coverage was in early June, via The Washington Post, when Stuxnet received so much press attention.